5/8/2025
Smiths Group Kicks Off Break-up with Move to Sell £1 Billion Unit
Financial Times (05/08/25) Levingston, Ivan; Pfeifer, Sylvia; Barnes, Oliver
Smiths Group is pressing ahead with plans to sell its £1bn electrical connectors division, taking the first step towards a break-up of the London stock market’s last large industrial conglomerate. The FTSE 100 company, known for making airport security scanners, has begun pre-marketing its Smiths Interconnect division and plans to kick off a sales process in the coming days, according to people familiar with the matter. The division could be worth about £1 billion, they added. Bankers at Goldman Sachs and JPMorgan are working on the sale of the unit, which makes high-tech components for satellite and aerospace communications. Smiths’ business spans aerospace, communications, energy and security. The company said earlier this year that it would sell or demerge two of its four core divisions and return a large proportion of the proceeds to shareholders after coming under pressure from activist investors, including Elliott Management and Engine Capital. Roland Carter, Smiths’ chief executive, insisted at the time that a review of the company’s businesses had already been under way before the investors’ intervention. The sale of the Interconnect unit, which has about 2,600 staff according to its most recent annual report, would be the first step in the break-up. The sale could attract interest from both private equity and trade suitors, said some of the people familiar with the plans. Smiths has said that it plans to sell its Interconnect business this year, followed by a demerger or sale of Smiths Detection, which makes baggage-screening scanners used in airports. Interconnect accounted for 13% of the entire company’s revenue in the six months to the end of January. The business generated £202 million of revenue and £35 million in headline operating profit in the period. The company plans to shift its focus towards industrial technologies through its John Crane division, which makes seals and components that control the flow of liquids and gases, and its Flex-Tek business, a maker of heating elements. Analysts have said the disposals could eliminate the “conglomerate discount” on Smiths’ share price. In February, the shares hit an all-time high following the announcement of the break-up plan, before receding. They are up 14% this year, giving the company a market capitalization of close to £7 billion.
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